|
What are the Special Common Shares?
Special Common Shares represent shares of Common Shares
of TDS which are substantially identical in rights, powers
and limitations to the Common Shares, except that (unless
required by law) the Special Common Shares do not vote in
matters other than the election of certain directors.
Back to top
5
What is the stock dividend of the
Special Common Shares?
The stock dividend, which occurred May 13, 2005 to shareholders
of record as of April 29, 2005, consisted of one Special
Common Share for each issued Common Share and Series A Common
Share, including Common Shares held by Telephone and Data
Systems, Inc. or its subsidiaries.
Back to top
5
I am a holder of TDS Common Shares.
How am I affected by the TDS Special Common Share dividend?
If you are a holder of record of TDS Common Shares or Series
A Common Shares as of April 29, 2005 on May 13, 2005, you
should receive one share of TDS Special Common Shares for
each share of TDS Common Shares or Series A Common Shares
you own.
Back to top
5
When did the Special Common Shares
dividend occur?
The Special Common Shares dividend was distributed on May
13, 2005 to shareholders of TDS Common Shares or Series
A Common Shares of record as of April 29, 2005.
Back to top
5
Does TDS intend to pay a cash dividend
on the Special Common Shares?
The TDS Board of Directors declared a second-quarter 2005
dividend of $.0875 per Common, Special Common and Series
A Common Shares on May 18, 2005. Payment will be made on
June 30, 2005 to shareholders of record on June 16, 2005.
TDS has paid cash dividends on its Common Shares and Series
A Common Shares since 1974. As a result of the stock dividend
of Special Common Shares on May 13, 2005, TDS will also
be paying a cash dividend on its Special Common Shares.
Because the Special Common Share stock dividend doubled
the number of outstanding shares of common stock, the TDS
board of directors declared a quarterly cash dividend in
an amount equal to $0.875 per share, which is one-half of
the previous quarterly per-share dividend of $0.175. The
TDS Board of Directors indicated that it was the Board's
intention to keep the aggregate amount of the dividend the
same. For more information, see the "Dividend Policy" section
on page 13 of the
March 14, 2005 proxy statement.
Any future cash dividends are dependent on declaration by
the TDS Board of Directors.
Back to top
5
What do I need to do to receive my
certificates for the Special Common Shares?
You do not need to do anything to receive your certificates
for the Special Common Shares. Certificates representing
Special Common Shares will be mailed to all holders of record
of TDS Common Shares and Series A Common Shares following
the distribution on May 13, 2005.
However, if you hold your shares in "street name" through
a bank, broker or dealer, you will need to contact the institution
to determine how you will receive notice and custody of
the Special Common Shares.
Back to top
5
Should I send in my stock certificates?
No. You should not send in your existing stock certificates
representing shares of TDS. Shareholders should retain all
certificates which represent shares of TDS, since such certificates
will continue to represent Common Shares, Series A Common
Shares or Preferred Shares, as the case may be, of TDS.
Back to top
5
What are the tax consequences to
me?
The distribution is intended to be tax-free for U.S. federal
income tax purposes to shareholders. For more information,
see "Proposal 1 - Special Common Share Proposal - Certain
Federal Income Tax Considerations - The Distribution"
in the
March 14, 2005 proxy statement.
Back to top
5
Where can I find additional tax-related
information regarding the Special Common Shares?
See "Tax-related Information
related to the Special Common Shares."
Back to top
5
Are the Special Common Shares listed
on a securities exchange?
Yes. The Special Common Shares of TDS are listed on the
New York Stock Exchange under the symbol "TDS.S"
Back to top
5
How do shares of Special Common Shares
vote?
Holders of Special Common Shares (with one vote per share)
will vote together with holders of Common Shares (with one
vote per share) in the election of 25 percent of the directors
plus one director (or four of the twelve present directors).
Other than as required by law, holders of Special Common
Shares do not have any right to vote on any matters except
in the election of certain directors, as described above.
Accordingly, actions submitted to a vote of shareholders
other than the election of directors will generally be voted
on only by holders of Common Shares, Series A Common Shares
and Preferred Shares.
Back to top
5
How do shares of Common Shares vote
since the distribution of the Special Common Shares?
Holders of Common Shares (with one vote per share) vote
together with holders of Special Common Shares (with one
vote per share) in the election of 25 percent of the directors
plus one director (or four of the twelve present directors).
The holders of Series A Common Shares and Preferred Shares,
voting as a group, will elect the remaining directors (eight
out of 12 directors) who are not elected by the holders
of Special Common Shares and Common Shares.
Back to top
5
Do the Special Common Shares have
any impact on TDS Common Shares?
No. The Common Shares of TDS continue to be listed on the
New York Stock Exchange under the symbol "TDS."
Back to top
5
Why did TDS wish to increase the
authorized number of Special Common Shares to 165 million?
The increase to the number of authorized Special Common
Shares serves several purposes. They should provide TDS
greater strategic and financial flexibility. The Special
Common Shares should also help facilitate acquisitions and
raise funds in the capital markets. In 2005, TDS indicated that it may
at some point in the future make an offer to issue Special
Common Shares in exchange for all of the Common Shares of
U.S. Cellular [NYSE: USM] that TDS does not currently own,
approximately 18 percent of U.S. Cellular common stock.
The purpose of any such offer from TDS would be to cause
U.S. Cellular to become a wholly owned subsidiary of TDS.
Whether TDS completes such a transaction depends upon market
and other conditions, and the company has no set timeline
for such a transaction at present. Should the transaction
occur, TDS does not foresee it as having any effect on the
day-to-day operations at U.S. Cellular.
In March 2007, TDS announced that it was ceasing activity related to its possible offer to
acquire all of the common shares of U.S. Cellular.
Back to top
5
What is the timeline for TDS to acquire
the remaining 18 percent of U.S. Cellular that TDS does
not own?
There is no timeline associated with the potential transaction.
TDS has indicated that it may at some point in the future
make an offer to acquire the 18 percent of U.S. Cellular
common stock that TDS does not currently own, using Special
Common Shares. Whether TDS completes such a transaction
depends upon market and other conditions, and the company
has no set timeline for such a transaction at present.
On March 5, 2007, TDS said that the exchange ratio (TDS.S :USM) was not
acceptable due to uneconomic terms and that it was no longer
considering such a transaction.
Back to top
5
What happened to TDS Common stock
on May 16th? The price of TDS's Commons stock went from
a close of $74.57 on May 13 to an open of $38.25 on May
16.
TDS completed the distribution of its special stock dividend
on May 13, 2005. As a result of the stock dividend, when
trading began May 16, the price of TDS common stock reflected
the stock dividend. Therefore the change in TDS Common stock
price from $74.57 to $38.25 reflected the stock dividend,
or a doubling of the shares outstanding, and not the actual
performance of the stock.
|
